Report date: 2026-09-13 | Price data: Close on September 11, 2026 (weekly data also as of 2026-09-11; investing.com technical indicators as of 2026-09-10 09:11 GMT; search completed around September 12, 2026) | Sources: 30 | Report engine: v1 (v2 available)

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Guizhou Zhenhua E-chem Inc. (688707)

Equity Research Report | Sector: Lithium Battery Cathode Materials | Report Date: September 13, 2026 | Close of September 11, 2026 (weekly data also as of 2026-09-11; investing.com technical indicators timestamp 2026-09-10 09:11 GMT; research completed approximately September 12, 2026)

This report was automatically compiled and generated by AI based on publicly available information. It is for reference only and does not constitute investment advice.

1. Core Summary

Zhenhua E-chem (688707.SH) reported revenue of RMB 650 million for H1 2026, down 8.85% year-over-year, with net profit attributable to shareholders of -RMB 174 million, a year-over-year loss reduction of 19.85%, and non-GAAP net profit attributable to shareholders of -RMB 181 million, a year-over-year loss reduction of 18.70%. Q2 2026 standalone revenue was RMB 467 million, turning positive with 5.79% year-over-year growth and surging 155.01% quarter-over-quarter; Q2 standalone net profit attributable to shareholders was -RMB 78.6557 million, improving 34.31% year-over-year and 17.73% quarter-over-quarter. Both the revenue side and the magnitude of loss reduction showed marginal stabilization signals. However, the company's H1 2026 consolidated gross profit margin remained at -6.93%, still in negative territory, with Q2 2026 standalone gross margin at approximately -9.94% (a substantial recovery from Q1), yet profitability has not yet turned positive.

From a revenue structure perspective, the company's full-year 2025 revenue was RMB 1.428 billion, down 27.16% year-over-year, with net profit attributable to shareholders of -RMB 432 million (a year-over-year loss reduction of approximately 18.06%). Full-year 2024 revenue was RMB 1.961 billion, down 71.48% year-over-year, with net profit attributable to shareholders of -RMB 528 million, turning from profit to loss. H1 2026 cathode material revenue was RMB 608.8 million, accounting for 93.71%, while other business revenue was RMB 40.86 million, accounting for 6.29%. Full-year 2025 overseas revenue was only RMB 168,900, accounting for 0.01%, with business almost entirely concentrated domestically. The company's revenue is highly dependent on the single ternary cathode material track; the traditional flagship 5-series ternary market share continues to shrink, and although the new-generation 6-series high-voltage material has completed customer certification, the import pace has lagged, and no large-scale orders were formed during the reporting period.

On the operational front, H1 2026 net operating cash outflow was RMB 38.141 million; full-year 2025 operating cash flow turned positive (+RMB 162 million); 2024 was -RMB 1.393 billion, with cash flow fluctuating dramatically. H1 2026 debt-to-asset ratio was 39.40%, down 1.32pct from the previous quarter. For 2025, the company did not distribute cash dividends, did not issue bonus shares, and did not convert capital reserves into share capital. At the industry level, H1 2025 lithium iron phosphate battery installations reached 81.4%, squeezing ternary installations below 20%. In a 2025 gross margin comparison of five key cathode companies, Zhenhua E-chem's cathode material gross margin was -14.29% (-0.26pct), the only negative-margin company among them, significantly below Ronbay Technology's 6.54%, Huayou Cobalt's 9.36%, GEM's 10.99%, and BTR's 10.46%.

On the technical front, as of the September 11, 2026 close, the company's share price was RMB 10.00, down 1.48% on the day and down 2.82% for the week, having broken below MA5 (RMB 10.28), MA10 (RMB 10.34), and MA20 (RMB 10.41), the three short-term moving averages. A MACD death cross below the zero line occurred on September 11; an RSI death cross crossing below 50 occurred on September 10; a "bear point" appeared simultaneously on the daily and 60-minute charts on September 11; and the current price of RMB 10.00 is below the average chip cost of RMB 12.81. Daily turnover was only 1.16%, with trading value of RMB 58.5621 million, indicating low volume. PB=1.33, net asset per share approximately RMB 7.5, 52-week change -39.00%. Due to the company's losses, the PE metric has no reference significance.

2. Company Overview

2.1 Basic Information

Item	Details
Stock name/code	Zhenhua E-chem / 688707
Listing board and date	Shanghai Stock Exchange STAR Market, listed 2021-09-14, IPO price RMB 12, 111 million shares issued
Full company name (foreign name)	Guizhou Zhenhua E-chem Inc. (abbreviated ZEC)
Date of establishment	2004-04-26
Registered address change	On 2018-05-25, relocated entirely from 44 Tiezai Road, Xixiang Street, Bao'an District, Shenzhen to 1 Gaokua Road, Baiyun District, Guiyang, Guizhou Province
Total share capital/registered capital	Total share capital approximately 508.74 million shares, registered capital RMB 509 million
Controlling shareholder	China Zhenhua Electronics Group Co., Ltd.
Actual controller	China Electronics Corporation (CEC, central state-owned enterprise)
Industry classification	SSE classification: Computers, Communications and Other Electronic Equipment Manufacturing; National Economy Industry Classification C3985 Electronic Special Materials Manufacturing; market concept sectors mostly classified under Power Equipment—Batteries—Battery Chemicals
Legal representative	2025 annual report discloses Zuo Caifeng; third-party data source (Compass) shows Hou Qiaokun, inconsistent with the 2025 annual report, suspected to be an interim executive change, an uncertainty requiring verification against the latest announcements
General Manager	Xiang Qianxin
Board Secretary	Wang Jing
Accounting firm	Daxin Certified Public Accountants (Special General Partnership)
Sponsoring institution	CITIC Securities
Production bases	Guiyang National High-tech Zone, Anlong Economic Development Zone, Qianxinan Prefecture (formerly Yilong New Area), both zero-carbon factories and nationally recognized green factories
Completed capacity	As of H1 2025, 82,000 tonnes/year cathode material production lines completed; of which 26,000 tonnes/year for high-nickel and ultra-high-nickel ternary capacity, 56,000 tonnes/year for medium-nickel and medium-high-nickel ternary (compatible with sodium-ion cathode production)

2.2 Main Business and Product Layout

R&D, production, and sales of lithium/sodium-ion battery cathode materials, solid electrolytes and their modified ternary and other materials
Core products: single-crystal large-particle nickel-cobalt-manganese oxide ternary cathode materials (NCM), covering the full range of medium-nickel, medium-high-nickel, high-nickel, and ultra-high-nickel, used in new energy vehicle power batteries, 3C consumer electronics, electric two- and three-wheelers, low-altitude economy, energy storage, etc.
Consumer electronics category: high-voltage lithium cobalt oxide, composite ternary materials, polycrystalline cathode materials
Frontier layout (not yet contributing revenue at scale): sodium-ion battery cathodes (layered oxides already shipping at hundred-tonne level, polyanion under customer validation), solid-state battery key materials (composite solid electrolytes already in stable tonne-level production, oxide-modified ternary and lithium-rich manganese-based in sampling stage), lithium manganese iron phosphate (performance improvement underway), phosphorus-carbon anode (R&D stage, company states it will evaluate layout in conjunction with Guizhou phosphate rock resources)
Revenue structure (FY2025): cathode material revenue RMB 1.394 billion, accounting for 97.60%; other (leasing, material/scrap sales, etc.) RMB 34.28 million, accounting for 2.40%
Revenue structure (H1 2026): cathode material revenue RMB 608.8 million, accounting for 93.71%; other RMB 40.86 million, accounting for 6.29%
Overseas revenue (FY2025): only RMB 168,900, accounting for 0.01%, business almost entirely domestic

2.3 Upstream/Downstream Industry Chain Position and Cost-Profit Structure

Zhenhua E-chem occupies the midstream processing segment of the lithium battery cathode material industry chain: upstream it purchases ternary precursors and lithium salts (costs directly linked to nickel, cobalt, lithium, and other metal prices), and downstream it sells to leading power battery and consumer battery companies. This section characterizes its bargaining relationships and industry chain position from four dimensions: upstream cost side, downstream customer side, working capital occupation, and multi-year gross/net margin trends.

Actual inputs for ternary cathode materials: primarily ternary precursors + lithium salts (lithium carbonate/lithium hydroxide); precursors themselves are composed of nickel salts, cobalt salts, and manganese salts, so costs are directly linked to nickel, cobalt, lithium, and other metal prices.
Supplier concentration (2025 annual report): top five suppliers total procurement RMB 837 million, accounting for 76.15% of annual procurement; of which Supplier 1 accounts for 45.99% (RMB 505 million), Supplier 2 13.71%, Supplier 3 9.91%, Supplier 4 3.30%, Supplier 5 3.24%.
Pricing power assessment: The company is essentially a price taker with respect to upstream metals/precursors — the 2025 annual report states upstream raw material prices have stabilized, and industry analysis (Qianzhan Industry Research Institute Porter's Five Forces) explicitly states suppliers have strong bargaining power, with raw material price fluctuations significantly impacting industry costs.
Company disclosure limitations: The 2025 annual report notes that the company's major customer names and supplier names are trade secrets, so the specific names of the top five suppliers are not disclosed, and it cannot be verified whether related parties are involved (the annual report also lists related-party procurement from the top five suppliers as 0).
Customers are leading power battery and consumer battery companies: CATL (largest customer, and CATL holds 6.562 million shares of the company, accounting for 1.48%), Farasis Energy, Amperex Technology Limited (ATL), China Automotive New Energy, Zhuhai CosMX, Microvast Power, Ganfeng Lithium, Hunan Lifang, Tianjin Lishen, Do-Fluoride, Zhongshan Tianmao, Huizhou Liwin, etc.
Customer concentration (2025 annual report): top five customers sales of RMB 1.202 billion, accounting for 84.16% of annual sales; of which Customer 1 accounts for 67.02% (RMB 957 million, single customer exceeding 50%, and the annual report explicitly states there exists a situation where sales to a single customer exceed 50% of total). Customer 1, based on public industry reports, is identified as CATL (Cailianshe states CATL is the company's largest customer), but the company did not directly name it in the annual report, making this an inference subject to the annual report's official language.
Customer concentration change: 2025 top five customers accounted for 84.16%, down 9.54 percentage points from 2024 (i.e., approximately 93.7% in 2024; this back-calculated figure comes from the 2025 annual report key points statement, and the 2024 segment figures were not item-by-item verified in the annual report text, marked as an estimate).
Bargaining dynamics: The downstream power battery industry is highly concentrated (CATL, BYD, etc.), with strong bargaining power and extreme low-price demands on cathode manufacturers; combined with lithium iron phosphate squeezing, ternary cathode manufacturers are in a passive price-concession position. This is similar to auto parts Tier-1 suppliers facing annual price reductions from OEMs, but closer to a downstream oligopoly buyer-dominated + material homogenization landscape.
Customer structure diversification initiatives: The company states that in 2025 it actively expanded into the digital and small power markets (related sales proportions each increased by approximately 6 percentage points year-over-year) and overseas markets (Korean customers achieved tonne-level sales and entered pilot testing; Japanese customers entered the second round of sample testing).
Net operating cash flow: 2023 +RMB 1.621 billion → 2024 -RMB 1.393 billion → 2025 +RMB 162 million; Q1 2026 (per single source hx168) was -RMB 205 million, operating cash flow per share -RMB 0.4. Cash flow fluctuates dramatically, reflecting occupation/collection deterioration and subsequent improvement during the revenue decline period. Receivables financing (bank/note category): 2025 decreased from RMB 427 million at the beginning of the period to RMB 258 million at the end (2025 annual report items measured at fair value table). Debt-to-asset ratio: approximately 40.13% at the end of Q3 2025 (Compass quote website, single source); end of 2025 net assets attributable to shareholders RMB 3.987 billion, total assets RMB 6.567 billion (2025 annual report). Note: This research was unable to cross-verify the company's explicitly disclosed accounts receivable turnover days, so it is not recommended to write specific days in the report; for this evidence, one would need to extract from the original annual report's key financial indicators/management discussion section. The above receivables/cash flow data sources are the 2025 annual report and third-party quote sites; except for annual report figures, all are single-source, and the annual report should be taken as authoritative.
Upstream: 2025 annual report top five suppliers total procurement accounted for 76.15%, of which Supplier 1 accounted for 45.99%, supplier names not disclosed (listed as trade secrets), and the annual report shows related-party procurement from the top five suppliers as 0. Downstream: 2025 annual report top five customers total sales accounted for 84.16%, of which Customer 1 accounted for 67.02%, a situation of single customer exceeding 50%; Customer 1's identity is inferred from public industry reports as CATL but the company did not name it; the approximately 93.7% figure for 2024 top five customers is a back-calculated value. All concentration data are taken from the 2025 annual report; specific names were not disclosed due to trade secrets, Customer 1's identity is an inference, and the annual report's official language should be taken as authoritative.

Gross Margin

Year	Gross Margin	Net Margin	Brief Explanation
2020	5.86%	Net margin attributable to shareholders approximately -16.4% (revenue RMB 1.037 billion, net profit attributable to shareholders -RMB 170 million, extrapolated from summary figures, not disclosed values)	Low-margin stage before ternary capacity tightened; the company had not yet entered the new energy vehicle volume ramp bonus period.
2021	14.59%	Net margin attributable to shareholders approximately 7.5% (revenue RMB 5.515 billion, net profit attributable to shareholders RMB 413 million, extrapolated from summary figures)	New energy vehicle explosion, ternary capacity tight, high nickel-cobalt-lithium prices could be passed downstream; revenue and profit leaped significantly.
2022	13.68%	Net margin attributable to shareholders approximately 9.1% (revenue RMB 13.936 billion, net profit attributable to shareholders RMB 1.272 billion, extrapolated from summary figures)	2022 was the peak year for revenue and profit; high metal prices could be passed downstream, gross margin maintained above 13%.
2023	6.77%	Net margin attributable to shareholders approximately 1.5% (revenue RMB 6.876 billion, net profit attributable to shareholders RMB 103 million, extrapolated from summary figures)	Sharp lithium price decline triggered inventory write-downs and price wars; revenue halved but assets/depreciation rigid, profit space compressed from the 10-percentage-point level to approximately 2.7 percentage points.
2024	-13.42% (cathode material segment -14.03%)	Net margin attributable to shareholders approximately -26.9% (revenue RMB 1.961 billion, net profit attributable to shareholders -RMB 528 million, extrapolated from summary figures)	Industry overcapacity, lithium iron phosphate further squeezing ternary installation share, combined with demand decline; the company's traditional flagship 5-series ternary market share shrank, capacity utilization declined, fixed costs and idle capacity losses rose, costs exceeded revenue.
2025	-12.91% (cathode material segment -14.29%)	Net margin attributable to shareholders approximately -30.3% (revenue RMB 1.428 billion, net profit attributable to shareholders -RMB 432 million, extrapolated from summary figures)	5-series shrinking; although the new-generation 6-series high-voltage material passed certification, no large-scale orders formed; sales volume continued to decline, capacity utilization at low levels, unit depreciation/labor and idle capacity losses increased year-over-year; gross margin only slightly declined by 0.26 percentage points.

Zhenhua E-chem occupies the midstream processing segment of the lithium battery cathode material industry chain (buying precursors + lithium salts upstream, selling to battery oligopolists downstream), belonging to the thin-margin, no-resource and no-brand-premium end of the midstream. Its technology label is the single-crystal large-particle ternary differentiation route. The current negative gross margin indicates that its processing segment's bargaining power has been squeezed from both ends by upstream metal price volatility and downstream extreme price pressure. The only realistic drivers for future gross margin improvement are three: capacity utilization recovery (6-series new product volume ramp), product mix upgrade toward high-nickel/ultra-high-nickel and solid electrolyte modification and other high-value-added products, and cost reduction and efficiency improvement. In the short term, it does not control upstream resources and is unlikely to have pricing power.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

Reporting Period	Revenue	YoY	Net Profit Attributable to Shareholders	YoY
H1 2026	RMB 650 million (RMB 649.7117 million)	-8.85%	Net profit attributable to shareholders -RMB 174 million (-RMB 174.2681 million)	Loss narrowed 19.85% YoY (prior year same period -RMB 217 million)
Q2 2026 standalone	RMB 467 million	+5.79% (QoQ +155.01%)	Net profit attributable to shareholders -RMB 78.6557 million	Improved 34.31% YoY, improved 17.73% QoQ
FY2025	RMB 1.428 billion (RMB 1,428.4682 million)	-27.16%	Net profit attributable to shareholders -RMB 432 million (-RMB 432.3851 million)	Loss reduced approximately 18.06% YoY (approximately RMB 95.32 million less loss than 2024)
FY2024	RMB 1.961 billion (RMB 1,961.1418 million)	-71.48%	Net profit attributable to shareholders -RMB 528 million (-RMB 527.7063 million)	Prior year same period was profit of RMB 103 million, turning from profit to loss

Disclosure dates: H1 2026 report disclosed on the evening of 2026-08-21 (published 8/22); FY2025 annual report disclosed on the evening of 2026-04-24; FY2024 annual report disclosed 2025-04-24/26. Q2 2026 standalone data are secondary/reported figures (sources: CS.com.cn, Shanghai Securities News). Supplementary data: H1 2026 non-GAAP net profit attributable to shareholders -RMB 181 million (-RMB 181.1319 million), loss reduced 18.70%; total profit -RMB 171.5 million; gross profit margin -6.93% (still negative); ROE -4.57%; debt-to-asset ratio 39.40% (down 1.32pct from previous quarter); net operating cash inflow -RMB 38.141 million. Q2 2026 standalone non-GAAP -RMB 83.6443 million. FY2025 non-GAAP net profit attributable to shareholders -RMB 445 million (-RMB 445.1591 million); total profit -RMB 454.8746 million; total assets RMB 6,567.2786 million (down 15.91% from 2024); 2025 no cash dividend, no bonus shares, no capital reserve conversion. FY2024 non-GAAP net profit attributable to shareholders -RMB 534 million (-RMB 534.4872 million), prior year same period +RMB 97.7119 million; basic earnings per share -RMB 1.05. Multi-year revenue/net profit series (RMB millions, source stockanalysis.com/Investing, consistent with company disclosure): revenue 2021 5,515 → 2022 13,936 → 2023 6,876 → 2024 1,961 → 2025 1,428 → TTM (as of 2026-06) 1,365; net profit attributable to shareholders 2021 412.58 → 2022 1,272 → 2023 102.68 → 2024 -527.71 → 2025 -432.39 → TTM (as of 2026-06) -389.22. Cross-validation: 2023 revenue RMB 6.876 billion consistent with Guotai Haitong research report; 2022 revenue RMB 13.936 billion consistent with Huatai research report.

The company had consecutive losses in 2024 and 2025, and remained loss-making in H1 2026. Revenue side: 2024 revenue declined 71.48% YoY (demand and price decline), 2025 revenue declined 27.16% YoY continuing to fall, but H1 2026 revenue decline narrowed to -8.85%, with Q2 2026 standalone revenue turning positive YoY (+5.79%) and +155.01% QoQ, showing marginal stabilization signals. Profit side: 2024 net profit attributable to shareholders -RMB 528 million (prior year was profit of RMB 103 million), 2025 net profit attributable to shareholders -RMB 432 million, loss reduced approximately 18.06%, H1 2026 net profit attributable to shareholders -RMB 174 million, loss narrowed 19.85% YoY, Q2 2026 standalone net profit attributable to shareholders -RMB 78.6557 million, improved 34.31% YoY and 17.73% QoQ, loss reduction trend continues. However, H1 2026 consolidated gross margin remained at -6.93% (negative), and profitability has not yet turned positive. Per disclosure, Q2 2026 standalone gross margin was approximately -9.94%, a substantial recovery from Q1, but overall profitability remains under pressure. Debt-to-asset ratio 39.40%, down 1.32pct from previous quarter. Operating cash flow in H1 2026 was a net outflow of RMB 38.141 million (FY2025 operating cash flow turned positive, but inventory write-down risk remains elevated). Profit inflection signals (approximately 18% loss reduction in FY2025, approximately 20% loss reduction in H1 2026, Q2 2026 standalone revenue turning positive YoY, gross margin substantially improving QoQ) may be cautiously mentioned, but it should be noted that profitability has not yet turned positive and gross margin remains negative. Outlook: traditional 5-series/8-series demand is contracting; 6-series medium-nickel high-voltage ternary has passed customer certification and is in volume sales; sodium-ion and solid-state battery materials (solid electrolytes, lithium-rich manganese-based) are in customer validation/pilot testing stages and are the main upside catalysts, but have not yet formed scale revenue.

3.2 Earnings Forecasts

The above are forecasts from Huajin Securities (analysts: Zhou Tao/He Chaohui) in a 2025-08-23 report, corresponding to PE -91/66/27x (based on report-date closing price of RMB 15.41). ⚠ This forecast is severely optimistic and has been falsified — actual FY2025 net profit attributable to shareholders was -RMB 432 million, far worse than its forecast of -RMB 87 million. Guotai Haitong Securities (Pang Junwen/Mu Junyu) 2024-05-06 forecast EPS 2024/2025/2026 = RMB 0.11/0.53/0.87, target price RMB 18.61 (based on 2024 1.73X PB), also significantly off from actual (2024 actual net profit attributable to shareholders -RMB 528 million), clearly outdated. Historical reports (all outdated and with invalidated forecasts, for reference only): Huatai Research 2023-04-28 estimated 23-25 net profit attributable to shareholders RMB 971/1,249/1,465 million, target price RMB 39.45; CICC 2023-01-11 target price RMB 55; Dongwu 2023-01-06 target price RMB 68.10; CITIC 2023-10-17 target price RMB 25; Guotai Junan 2023-10-18 target price RMB 29. Overall limitations: institutional coverage has significantly decreased since 2024, and there is currently a lack of multi-broker consensus earnings forecasts for 2026-2028 in public channels; existing forecasts are predominantly from a single broker and have been falsified, marked as 'single source, low credibility,' and cannot serve as reliable forward-looking guidance.

Year	Revenue	Net Profit Attributable to Shareholders	Net Profit Growth Rate	Earnings Per Share (EPS)
2025E	Data missing (no revenue forecast provided)	-RMB 87 million (Huajin Securities forecast)	Data missing	-RMB 0.17
2026E	Data missing (no revenue forecast provided)	+RMB 120 million (Huajin Securities forecast)	Data missing	RMB 0.24
2027E	Data missing (no revenue forecast provided)	+RMB 290 million (Huajin Securities forecast)	Data missing	RMB 0.57

3.3 Valuation Levels and Institutional Ratings

Institution	Rating	Date	Notes
Huajin Securities	Overweight	2025-08-23	Forecast 2025-2027 net profit attributable to shareholders -RMB 87/+120/+290 million, EPS -RMB 0.17/0.24/0.57, corresponding PE -91/66/27x; rationale based on sodium-ion, lithium manganese iron phosphate, lithium-rich manganese-based, solid-state battery cathodes and solid electrolyte progress, bullish on revenue elasticity. This forecast has been falsified by the 2025 annual report (actual FY2025 net profit attributable to shareholders -RMB 432 million)
Guotai Haitong Securities	Overweight	2024-05-06	Target price RMB 18.61 (based on 2024 1.73X PB); EPS 2024/2025/2026 = RMB 0.11/0.53/0.87 (substantially revised down). This forecast also significantly deviates from actual (2024 actual net profit attributable to shareholders -RMB 528 million), clearly outdated
Huatai Research	Overweight	2023-04-28	Target price RMB 39.45, estimated 2023-2025 net profit attributable to shareholders RMB 971/1,249/1,465 million; outdated and forecast invalidated
CICC	Outperform	2023-01-11	Target price RMB 55; outdated and forecast invalidated
Dongwu Securities	Buy	2023-01-06	Target price RMB 68.10; outdated and forecast invalidated
CITIC Securities	Buy	2023-10-17	Target price RMB 25; outdated and forecast invalidated
Guotai Junan	Overweight	2023-10-18	Target price RMB 29; outdated and forecast invalidated

Valuation data gap requires prominent flagging. Real-time market/valuation data as of September 2026 could not be successfully retrieved (valuation pages from Tonghuashun, Eastmoney, stcn, etc. did not return valid values in this research round); current PE/PB/total market cap data are missing, and it is recommended to supplement with real-time quote sources (Eastmoney/Tonghuashun/exchange quotes) and note the specific date before formal report release. Reference indirect clues (⚠ all at different time points, and from third-party rather than official sources): A Simply Wall St page shows market cap of approximately CN¥7.1b, another page shows approximately CN¥5.2b (different time points, inconsistent); Huajin Securities report date (2025-08-23) closing price RMB 15.41. Valuation logic note: The company had consecutive losses in 2024 and 2025, remained loss-making in H1 2026, dynamic PE is negative (meaningless/not applicable); valuation should primarily reference PB and 'PE under turnaround expectations'; currently no reliable current PB or total market cap figures have been obtained. Historical target prices/forecasts were all formed after the company's profit peak (2022-2023) in the demand and price decline phase, deviating greatly from actual trends, for reference only, and should not serve as current valuation anchors. Data timing note: All financial figures are 'disclosed' basis, see disclosure dates noted in each section; market-type figures (market cap/share price) have inconsistent time points, and 'as of' dates must be noted in the report. Coverage note: Institutional coverage has significantly decreased since 2024, lacking multi-broker consensus expectations for 2026-2028; existing forecasts are predominantly from a single broker and have been falsified, and cannot serve as reliable forward-looking guidance.

4. Recent News and Announcements

4.1 2025 Annual Results Pre-announcement (Loss Warning)

Disclosure time: evening of 2026-01-09 (announcement date 2026-01-10), announcement number 2026-002. Estimated 2025 net profit attributable to shareholders of -RMB 500 million to -RMB 400 million (loss of RMB 400-500 million); non-GAAP net profit attributable to shareholders -RMB 514 million to -RMB 414 million. Year-over-year loss reduction of RMB 27.7063-127.7063 million compared to prior year same period, loss reduction range 5.25%-24.20%; non-GAAP loss reduction range 3.83%-22.54%. Prior year same period (2024): net profit attributable to shareholders -RMB 527.7063 million, non-GAAP -RMB 534.4872 million, total profit -RMB 630.1377 million, EPS -RMB 1.05. Company explanation for losses: original product market demand shrinking, new products not yet forming batch orders, low capacity utilization, high per-unit allocated fixed costs such as depreciation/labor, idle capacity losses directly charged to costs; while continuously increasing R&D investment (including sodium-ion, solid-state battery materials, and other frontier directions), R&D expenses rose year-over-year. Reasons for narrowed loss: effective implementation of cost control measures + reduced impairment losses from raw material price increases. This data is unaudited.

4.2 2025 Annual Report (Official)

The 2025 annual report was disclosed on 2026-04-25. Distribution plan: 2025 proposes no cash dividend, no bonus shares, no capital reserve conversion into share capital; this plan was approved by the second meeting of the seventh board of directors and submitted to the 2025 annual shareholders' meeting for review. Audit firm: Daxin Certified Public Accountants (Special General Partnership), issuing a standard unqualified audit report. Uncertainty item: Sina Finance's "Earnings Pre-announcement" page separately lists a pre-announcement summary dated 2026-02-28, type "loss reduction," stating "estimated January-December 2025 net profit attributable to shareholders of the listed company: -RMB 432.3851 million." This figure falls within the pre-announcement range and is suspected to be an earnings flash report or pre-announcement revision, but is single-source, with no corresponding formal announcement found, and the 2025 annual report final audited net profit was not obtained in this round, so the 2025 full-year final net profit attributable to shareholders should be based on the annual report, and -RMB 432 million should not be directly taken on faith here.

4.3 2026 Semi-Annual Report

Disclosure time: evening of 2026-08-21. Core data (H1 2026): revenue RMB 649.71 million (RMB 649.7117 million), down 8.85% year-over-year; net profit attributable to shareholders -RMB 174.27 million (-RMB 174.2681 million), loss reduced 19.85% year-over-year; non-GAAP net profit attributable to shareholders -RMB 181.13 million (-RMB 181.1319 million), loss reduced 18.70% year-over-year. Q2 standalone: revenue RMB 467 million, +5.79% YoY; net profit attributable to shareholders -RMB 78.6557 million, +34.31% YoY; non-GAAP -RMB 83.6443 million, +31.55% YoY. Other: debt ratio 39.4%, gross margin -6.93%, H1 R&D investment RMB 62.5501 million, +16.65% YoY, accounting for 9.63% of revenue. Main reasons for losses: downstream demand order contraction leading to overall ternary material sales volume decline YoY (despite 6-series and 9-series sales growth); low capacity utilization; intensified industry competition and weakened bargaining power in the cathode segment pressuring selling prices.

4.4 2025 Annual Shareholders' Meeting

Held on 2026-05-18 (Baiyun District, Guiyang), 96 shareholders and proxies attended, representing 166,246,064 shares with voting rights, accounting for 32.6779% of total share capital; meeting chaired by Chairman Zuo Caifeng. Approved: 2025 board of directors work report, director compensation, financial final accounts report, 2025 no profit distribution, fundraising deposit and use, director and senior management compensation management system, and other proposals; all passed.

4.5 Extraordinary Shareholders' Meetings

First extraordinary shareholders' meeting of 2026: held 2026-01-09 (meeting notice announced 2025-12-16). Third extraordinary shareholders' meeting of 2026: held 2026-08-24, approved the "Proposal on By-electing Mr. Qin Xudong as Non-Independent Director of the Seventh Board of Directors."

4.6 Directors/Supervisors/Senior Management and Governance Changes

2025-10-24: 28th meeting of the sixth board of directors, announcement on appointing company deputy general manager. 2025-10-25: announcement on revising certain internal control systems of the company. 2025-10-24: announcement on renewing the accounting firm (renewing Daxin Certified Public Accountants as 2025 audit institution), which was approved at the 2025-11-10 extraordinary shareholders' meeting. Chairman change note: The 2025-11-10 announcement shows chairman as Hou Qiaokun; while 2026-05-18 and 2026-09-03 activities show chairman as Zuo Caifeng. It is presumed that a board term change/chairman change occurred during this period, but the specific appointment/dismissal announcement was not retrieved in this research round, constituting a time-point gap requiring verification.

4.7 Shareholder Structure (Top Ten Tradable Shareholders, Data as of 2026-03-31)

China Zhenhua Electronics Group Co., Ltd. 24.65%; China Electronics Jintou Holding Co., Ltd. 5.66%; CDB Manufacturing Transformation and Upgrade Fund (Limited Partnership) 4.91%; Central Enterprise Rural Industry Investment Fund Co., Ltd. 3.75%; SDIC (Shanghai) Science and Technology Achievement Transformation Venture Capital Fund Enterprise (Limited Partnership) 2.69%; Zhoushan Xintianyu Growth Equity Investment Partnership (Limited Partnership) 2.53%; Shenzhen Xintianyu Phase VI Equity Investment Partnership (Limited Partnership) 1.83%; Dong Xia 1.49%; Hong Kong Securities Clearing Company Limited 1.19%; Xiang Qianxin 1.11%. No recent controlling shareholder or director/supervisor/senior management reduction announcements were found; no increase announcements either (within this research scope).

4.8 Share Buyback (2024 Old Matter)

The most recent known buyback was the 2024 "stabilize stock price" buyback: 2024-08-06 board review, 2024-08-08 disclosure of the plan (number 2024-040), 2024-08-23 shareholders' meeting approval; buyback price cap RMB 9.7282/share, planned amount RMB 10.27-30.80 million, for reducing registered capital. Actual execution: only 44,000 shares repurchased (0.0086% of total share capital), actual amount RMB 394,748.94, price range RMB 8.76-9.15/share; completed cancellation on 2024-10-21. Early termination reason: The 2024-10-17 closing price already met "10 consecutive trading days above the most recent audited net asset per share of RMB 9.7282," triggering the termination condition of the stock price stabilization plan, so the plan was completed. Important: This research round found no new buyback plans for 2025 or 2026. The above buyback is a 2024 old matter, and the actual buyback scale was extremely small, more symbolic than substantive, and should not be viewed as a "recent buyback positive." If the report needs coverage, please note "as of mid-September 2026, the most recent buyback was the 2024 stock price stabilization buyback."

4.9 Fundraising Projects/Capital Operations/Related-Party Transactions

(1) A batch of announcements centrally disclosed on 2025-12-16: Shaven Phase II "Lithium-Ion Battery Cathode Material Production Line Construction Project" proposed for completion, with surplus fundraising funds of RMB 55.8293 million permanently supplementing working capital; IPO fundraising projects completed and surplus fundraising funds permanently supplementing working capital (CITIC Securities sponsorship verification opinion); on continuing to use part of temporarily idle fundraising funds for cash management; announcement on a wholly-owned subsidiary proposing to sign an equipment procurement contract and related-party transaction; on 2026 annual daily related-party transaction quota estimates, 2026 annual guarantee quota estimates (and CITIC Securities verification opinions). (2) Yilong Phase III project: a 2022 private placement (proposed fundraising RMB 6 billion, for the 2022 targeted issuance of A-shares to specific objects) fundraising project; the company is advancing "re-demonstration" work, conducting research on macroeconomic conditions, power battery industry landscape, downstream core customer long-term demand planning, etc., and has not yet restarted. (3) CITIC Securities continuous supervision: as the 2022 private placement sponsor, conducted on-site inspection of the company from 2026-08-19 to 08-21, and issued the "2026 Annual Continuous Supervision Periodic On-Site Inspection Report" and "2026 Semi-Annual Continuous Supervision Tracking Report," both disclosed on 2026-09-03; conclusion is that corporate governance/internal control/information disclosure/fundraising fund use, etc. are compliant, with no violations or breach of commitments found.

4.10 Regulatory/Policy/Industry News

New battery consumption tax policy: A consumption tax on battery products will be levied starting from 2026-09-01. At the 2026-09-03 results briefing, the company explicitly stated that "semi-solid-state batteries are not within the exemption scope," and stated that its 6-series cathodes are mainly compatible with liquid and semi-solid-state systems and have achieved volume supply. This policy is company-stated, reported by Shanghai Securities News/Securities Times, and constitutes an industry policy risk point. Battery recycling concept: In 2026 (approximately August-September) reports on "battery recycling concept continuing to strengthen," Zhenhua E-chem was listed as one of the stocks that followed the rally (Eastmoney F10 information page). This is sector linkage information, not a company announcement.

4.11 Operational and Technical Progress (2026-09-03 Semi-Annual Results Briefing/2026-09-04 Investor Relations Record)

On the afternoon of 2026-09-03, the company participated in the "STAR Market 2026 Semi-Annual New Energy Industry Collective Results Briefing" (SSE Roadshow Center 15:00-17:00), attendees: Chairman Zuo Caifeng, General Manager Qin Xudong, Board Secretary Wang Jing, Chief Accountant Liu Jin, Independent Director Fan Qiyong. The investor relations activity record was disclosed on 2026-09-04 (announcement number see Eastmoney AN202609041829021756). Key points: 6-series ternary materials: accounted for nearly 50% of total ternary material sales volume in H1 2026; monthly shipments continued to climb, nearly 1,000 tonnes in June and 1,600 tonnes in July (historical peak); August sales roughly flat vs July. Solid electrolyte pilot line: equipment installation has entered the final stage; subsequent capacity expansion will be planned in coordination with commercialization progress, customer validation progress, and order demand. Phosphorus-carbon anode: currently in R&D stage; will study and evaluate the feasibility of extending into phosphorus-carbon anode production lines using Guizhou phosphate rock resources. Bad debt recovery: For a total of RMB 64 million in large bad debts from two customers, the company has established a special collection team, pursuing recovery through business negotiations, lawyer's letters, and litigation. Sodium-ion: layered oxide sodium-ion cathodes have achieved hundred-tonne level shipments; polyanion sodium-ion cathodes are under customer validation. Three-year plan: deepen 6-series core business, accelerate solid-state/sodium-ion frontier commercialization, optimize capacity and customer structure, reduce costs and improve efficiency; explicitly no expansion into semiconductor materials.

4.12 Uncertainties and Limitations to Flag

1) Current time baseline: The latest data point is 2026-09-12, from which "current" is inferred to be approximately mid-September 2026; if actual time point differs, adjust the "recent" window accordingly. 2) 2025 full-year final audited net profit not obtained: Only the 2026-01-09 pre-announcement range (-RMB 400-500 million) and the single-source figure of -RMB 432.3851 million dated 2026-02-28 on Sina's list; both should be subject to the annual report disclosed on 2026-04-25. 3) Chairman change timing unconfirmed: Hou Qiaokun in 2025-11, Zuo Caifeng from 2026-05; appointment/dismissal announcements not retrieved in this round. 4) Buyback information may be incomplete: Only the 2024 stock price stabilization buyback (actual 44,000 shares repurchased) confirmed; no new buyback plans found for 2025-2026. 5) Target identification reminder: 688707 corresponds to Zhenhua E-chem; do not confuse with 688439 Zhenhua Fengguang, 000733 Zhenhua Technology, or 688708 Jiachi Technology.

5. Share Price Trend and Technical Analysis

5.1 Price Overview

Indicator	Value
Closing price	RMB 10.00 (down RMB 0.15, -1.48%)
Open / Previous close	RMB 10.11 / RMB 10.15
Intraday high / low	RMB 10.11 / RMB 9.76, amplitude 3.45%
Average price	RMB 9.90 (closing price above average, slight late-session pullback)
Volume / Trading value	59,100 lots / RMB 58.5621 million, volume ratio 1.11
Turnover rate	1.16% (low)
Total market cap = free-float market cap	RMB 5.087 billion (total share capital and free-float share capital both 509 million shares, fully circulating)
PB / Net asset per share	PB 1.33, net asset per share approximately RMB 7.5
Price-to-sales TTM	3.73
Earnings per share (TTM basis)	-RMB 0.3425
Dynamic PE / Static PE	-14.60 / -11.77 (company loss-making, PE meaningless)
PE(TTM)	-13.07 (Jiufang) / "--" (Sina), source methodologies inconsistent
52-week high / low	RMB 18.85 / RMB 9.29 (specific occurrence dates not obtained, only range confirmed)
52-week change	-39.00%
Limit up / limit down price	RMB 12.18 / RMB 8.12
Weekly change (vs 9/4 close RMB 10.29)	Close RMB 10.00, down 2.82% for the week
Weekly intraday high / low	RMB 10.50 (9/9 intraday) / RMB 9.76 (9/11 intraday)
Period changes	Year-to-date approximately -26% to -28%; last 60 days approximately -28.5% to -29.2%; last 20 days approximately -3.8% to -6.1%

5.2 Technical Indicators

Indicator	Value	Brief Interpretation
MA5 / MA10 / MA20 (as of 2026-09-11, Jiufang Zhitou; MA5 verified by back-calculation using 9/7-9/11 closing prices, consistent)	MA5=10.28, MA10=10.34, MA20=10.41	Closing price RMB 10.00 below MA5, MA10, MA20; short-term moving average system in bearish alignment; moving average cluster dense at RMB 10.28-10.41, forming overhead resistance band
50-day MA / 200-day MA (stockanalysis.com, Sep 11, 2026)	50-day MA 10.50, 200-day MA 13.53; Beta(5Y) 0.46	Price below both 50-day and 200-day MAs, medium-term trend weak; 200-day MA single-source without secondary verification, for reference only. investing.com separately lists MA200 at approximately 10.39, severely conflicting with stockanalysis's 13.53; combined with 52-week high of 18.85 and average chip cost of RMB 12.81, investing.com's entire MA group (MA5-MA200 all clustered at RMB 10.2-10.5) is suspected of data source anomaly and is not adopted here
Moving average/technical indicator rating (investing.com, timestamp 2026-09-10 09:11 GMT)	Moving averages 0 buy/12 sell (strong sell); technical indicators 0 buy/9 sell (strong sell)	Multi-source technical signals overall bearish
RSI(14)	35.72 (investing.com, 9/10, sell); 40.05 (stockanalysis.com, 9/11)	RSI in weak zone around 40; Jiufang notes RSI death cross on September 10, short-term RSI crossing below 50. RSI6 not obtained; different methodology from RSI(14), cannot be mixed
MACD(12,26) (Jiufang Zhitou, 2026-09-11)	DIF=-0.15, DEA=-0.14, MACD histogram=-0.02; investing.com MACD= -0.07 (sell)	MACD death cross below zero line occurred on September 11, continuing weak decline
ADX(14) (investing.com)	31.12	Trend strength indicator in relatively strong zone, consistent with the judgment that the current downtrend continues
Williams %R / STOCHRSI(14) (investing.com)	Williams %R=-94.60 (oversold); STOCHRSI(14)=5.78 (oversold)	Some oscillators entering oversold territory, but oversold itself does not constitute reversal confirmation
CCI(14) / ATR(14) (investing.com)	CCI(14)=-127.94 (sell); ATR(14)=0.0936	CCI bearish; ATR(14)=0.0936 notably small relative to the stock's daily 2%-3.5% amplitude, suspected methodology issue, not used as volatility measurement basis
BOLL (Bollinger Bands)	No credible upper/lower band values obtained in this research round (Eastmoney Qian Gu Qian Ping only shows "no obvious signal," without band values)	Data missing; no unfounded filling. Key support/resistance levels below are derived using moving average clusters, recent swing highs/lows, 52-week extremes, and average chip cost
Pattern and trend signals (Jiufang Zhitou, 2026-09-11)	Strength trend crossed below from holding zone to watch zone on August 31, short-term entering bearish market, downward momentum not yet exhausted; "downpour" bearish candlestick pattern appeared August 31; daily-level "bear point" appeared September 11, 60-minute level also in bear point zone; 5-day cumulative DDX -0.029, large orders outflow for 15 days in the last 20 days	Multiple pattern signals bearish; short-term trend and capital direction consistently weak
Chip cost (Jiufang Zhitou)	Average chip cost RMB 12.81, latest price RMB 10.00 below average chip cost	Current price below market average holding cost; overhead trapped positions constitute potential pressure
Eastmoney Qian Gu Qian Ping (2026-09-11 17:00)	Composite score 55.56, ranked 63rd in battery industry, beating only 15.21% of stocks market-wide; industry average 58.88; institutional participation 21.02% (light control); most recent 1-day main force cost RMB 9.90, most recent 20-day main force cost RMB 10.42; MACD/KDJ/RSI/BOLL all show "no obvious signal"	Score below industry average; institutional participation at light control level. Its "next-day rise probability 54.79%, 5-day rise probability 49.43%" are historical statistical distributions, not predictions for this stock
20-day average volume (stockanalysis.com)	Approximately 6.1 million shares (approximately 61,000 lots)	Used to calibrate the volume confirmation signal reference baseline below

As of the September 11, 2026 close, Zhenhua E-chem closed at RMB 10.00, down 1.48%, down 2.82% for the week, having broken below MA5 (10.28), MA10 (10.34), and MA20 (10.41), the three short-term moving averages, with the moving average cluster forming overhead resistance at RMB 10.28-10.41. A MACD death cross below the zero line occurred on September 11; an RSI death cross crossing below 50 occurred on September 10; a "downpour" bearish candlestick pattern appeared on August 31 with a cross below from holding zone to watch zone; a "bear point" appeared simultaneously on daily and 60-minute charts on September 11; multiple pattern signals point to a short-term bearish setup with downward momentum not yet exhausted. The current price of RMB 10.00 is below the average chip cost of RMB 12.81; overhead trapped positions constitute potential pressure. On the capital side, main force funds turned to net inflow of RMB 3.1879 million on September 11 alone (5.44% of trading value), but for the week main force funds still totaled net outflow of RMB 1.5551 million, hot money net inflow RMB 12.5063 million, retail net outflow RMB 10.9512 million; margin financing net outflow of RMB 63.8178 million over the past 3 months, large orders outflow for 15 days in the last 20 days. Turnover rate 1.16%, trading value RMB 58.5621 million, volume low. On valuation, the company's TTM net profit is negative, PE is meaningless; actual reference is PB=1.33 (corresponding to net asset per share of approximately RMB 7.5). Special note: The 200-day MA from two sources (10.39 vs 13.53) severely conflicts, BOLL upper/lower bands not obtained with credible values, RSI6 missing, ATR(14)=0.0936 suspected methodology issue; the above missing or divergent items have not been forcibly filled in this report.

5.3 Short-Term Outlook (Next Week, Scenario Analysis, For Reference Only)

⚠️ Risk Warning: The following content is solely a subjective scenario analysis based on public technical and capital flow data as of the September 11, 2026 close. It does not constitute investment advice or any buy/sell instruction. Please make independent judgments based on the latest market information and bear investment risks yourself.

① Key Technical Levels

Level	Range	Explanation
Short-term resistance	RMB 10.28-10.41	Moving average cluster formed by MA5=10.28, MA10=10.34, MA20=10.41; 50-day MA at RMB 10.50 immediately above, can be viewed as the extended upper edge of this resistance band. Only by recovering and holding above this range can a reversal of the short-term bearish structure be considered
First support	RMB 9.76-9.90	Recent low area formed by September 11 intraday low of RMB 9.76 and that day's average price of RMB 9.90; if RMB 9.76 is effectively breached, the downside will directly face the 52-week low of RMB 9.29
Strong support	RMB 9.29-9.35	Anchored by the 52-week low of RMB 9.29 (specific occurrence date not obtained). If this level is effectively breached, there is no known historical trading reference below, and the price will enter new low territory outside the 52-week range; on a rebound, this level may turn into resistance
Medium-term resistance (reference)	RMB 12.81-13.53	Medium-term reference band formed by average chip cost of RMB 12.81 and 200-day MA of RMB 13.53 (single source, not secondary verified), far from current price, serving only as reference for overhead trapped position distribution, not participating in next week's scenario analysis

② Next Week Scenarios (Subjective Weights, Not Statistical Probabilities)

Consolidation (relatively higher weight, approximately 60% (subjective judgment, not statistical probability)): Price repeatedly digests within the RMB 9.76-10.41 range. Trigger conditions: Trading value maintained at the current low level of approximately RMB 58.56 million, main force funds oscillating between sporadic inflow and outflow (e.g., the September 11 net inflow of RMB 3.1879 million cannot sustainably amplify), and the lithium battery cathode material sector overall showing no directional movement. In this scenario, the September 11 intraday low of RMB 9.76 and the short-term moving average cluster of RMB 10.28-10.41 form the lower and upper edges respectively, with price converging between them.
Bearish downside (moderate weight (subjective judgment, not statistical probability)): Price effectively breaks below the first support lower edge of RMB 9.76 and probes toward the strong support of RMB 9.29-9.35. Trigger conditions: MACD histogram continues to expand after the below-zero death cross, single-day trading value cannot effectively amplify but main force funds return to continuous net outflow (reference the 9/8 to 9/10 consecutive net outflow state of -RMB 4.0206/-1.7897/-4.3071 million), or the sector shows synchronous weakening. If strong support of RMB 9.29 is also effectively breached, there is no known historical reference below.
Rebound strengthening (relatively low weight (subjective judgment, not statistical probability)): Price breaks upward through the short-term resistance band of RMB 10.28-10.41 and holds, further challenging the 50-day MA of RMB 10.50. Trigger conditions: Need clear volume coordination (single-day trading value significantly amplified from current level) and continuous net inflow of main force funds, and typically need the lithium battery cathode material sector or STAR Market small-cap stocks overall sentiment recovery as coordination; combined with current RSI, StochRSI, Williams %R all having entered oversold territory, there is soil for technical rebound. Before volume and capital are confirmed, this scenario is only an alternative.

③ Capital and Liquidity Background

Liquidity: September 11, 2026 single-day trading value RMB 58.5621 million, volume 59,100 lots, turnover rate only 1.16%, volume ratio 1.11; 20-day average volume approximately 6.1 million shares (approximately 61,000 lots, source stockanalysis.com). With a total market cap of RMB 5.087 billion (fully circulating) corresponding to less than RMB 60 million daily trading value, this is a typical small-cap stock with relatively low liquidity; actual trading order book depth is limited, and large buy/sell impact costs and slippage may be relatively high. On capital structure, September 11 main force funds net inflow RMB 3.1879 million (5.44% of trading value) but super-large orders were 0, entirely contributed by large orders; for the week (9/7-9/11) main force funds totaled net outflow of RMB 1.5551 million, hot money net inflow RMB 12.5063 million, retail net outflow RMB 10.9512 million; under Jiufang Zhitou methodology, main force funds cumulative net outflow of RMB 7.8757 million over the last 10 days (the same page also has a "last 10 days main force fund outflow proportion -18.64%" statement; the same data source has two coexisting methodologies, self-contradictory, for directional reference only); margin financing net outflow of RMB 63.8178 million over the past 3 months; Eastmoney Qian Gu Qian Ping shows institutional participation of 21.02%, at "light control" level, most recent 1-day main force cost RMB 9.90, most recent 20-day main force cost RMB 10.42. On chip concentration: This research round did not obtain specific data on top ten shareholder holding concentration or mainstream institutional holdings such as public funds/social security/QFII, and cannot determine the relative proportion of institutional investors and controlling shareholder-type (China Zhenhua Electronics Group, China Electronics Corporation) holdings in the current shareholder structure; this field is noted as missing data. What can be confirmed is that the company's total share capital and free-float share capital are both 509 million shares, fully circulating, the controlling shareholder is China Zhenhua Electronics Group, and the actual controller is China Electronics Corporation (SASAC of the State Council), a central state-owned enterprise background STAR Market small-cap stock. The above chip and institutional holding data have disclosure lags; actual structure may have changed, and the latest periodic reports should be taken as authoritative when using.

Volume confirmation signal: If subsequent single-day trading value continues to amplify above RMB 100 million (approximately 1.7x or more of the September 11 trading value of RMB 58.5621 million, also notably above the 20-day average normal level of approximately 61,000 lots), this can be viewed as an observation signal of capital involvement; conversely, if trading value continues to shrink below RMB 60 million, the weak consolidation or slow decline pattern is likely to continue. This signal is for observation only and does not constitute a buy/sell basis.

④ Points to Watch (Observation Ideas Only, Not Trading Instructions)

Observe whether the short-term resistance band of RMB 10.28-10.41 (MA5/MA10/MA20 moving average cluster, upper edge extending to 50-day MA at RMB 10.50) can be recovered with volume, and whether the first support zone of RMB 9.76-9.90 can be held — the above are all observation ideas, not trading instructions.
Observe the effectiveness of strong support at RMB 9.29-9.35 (anchored by 52-week low of RMB 9.29): If effectively breached, price will enter new low territory outside the 52-week range lacking known historical reference; on a rebound, this level may also turn into resistance.
Observe whether single-day trading value can sustainably amplify above RMB 100 million as a capital involvement signal, or whether it continues to shrink below RMB 60 million; also track whether main force funds can turn from this week's net outflow of RMB 1.5551 million to continuous net inflow, rather than just a single-day inflow like September 11.
Observe whether the MACD (September 11 below-zero death cross) histogram continues to expand, whether RSI can stabilize and rebound from the weak zone around 40, and whether the daily/60-minute "bear point" status is lifted; technical indicators have lags and need to be judged together with price and volume. The above are all observation ideas, not trading instructions.

The above scenario analysis is based on September 11, 2026 closing data and historical price and technical indicator calculations. Short-term stock prices are also subject to multiple factors including news, capital flows, and overall market environment. Technical indicators themselves have lags and limitations, do not guarantee future actual trends, and do not constitute buy/sell advice. Please make independent judgments based on the latest market information and bear investment risks yourself.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

The lithium battery cathode material industry presents a landscape where ternary is squeezed by lithium iron phosphate, industry concentration is relatively low, and upstream and downstream bargaining is strong at both ends. H1 2025 lithium iron phosphate battery installations accounted for 81.4%, with ternary installations squeezed below 20%; 2025 domestic lithium iron phosphate cathode shipments were 3.944 million tonnes, +62.5% YoY, accounting for 79.1% of total cathode material shipments (Zhiyan Consulting). Ternary itself: H1 2025 global ternary material production was 455,000 tonnes, -4.5% YoY; China ternary material production was 321,000 tonnes, +7.3% YoY (Xinluo Information, cited in the company's 2025 annual report); Chinese companies' global ternary share rose from 63.8% in 2024 to 74.4% in 2025 (Xinluo). The competitive landscape features strong upstream supplier bargaining power, strong downstream battery oligopolist bargaining power, extremely intense intra-industry competition, low-end overcapacity driving price wars, and technology iteration and integration layout becoming core barriers.

6.2 Competitive Landscape

Ternary squeezed by lithium iron phosphate: H1 2025 lithium iron phosphate battery installations accounted for 81.4%, with ternary installations squeezed below 20%; 2025 domestic lithium iron phosphate cathode shipments were 3.944 million tonnes, +62.5% YoY, accounting for 79.1% of total cathode material shipments (Zhiyan Consulting).
Ternary itself: H1 2025 global ternary material production was 455,000 tonnes, -4.5% YoY; China ternary material production was 321,000 tonnes, +7.3% YoY (Xinluo Information, cited in the company's 2025 annual report); Chinese companies' global ternary share rose from 63.8% in 2024 to 74.4% in 2025 (Xinluo).
Concentration: Full cathode material industry 2024 by production CR3=21.9%, CR5=29.4%; by shipment volume CR3=19.3%, CR5=25.9% (Qianzhan Industry Research Institute). Ternary sub-segment 2023 CR10 approximately 80% (Orient Securities special report).
Competitive landscape: Strong upstream supplier bargaining power, strong downstream battery oligopolist bargaining power, extremely intense intra-industry competition, low-end overcapacity driving price wars, technology iteration and integration layout becoming core barriers.
Company's own industry position changes: 2020 domestic ternary market share approximately 7%, ranked 8th (Liding Industry Research Network); 2021 market share 8%, ranked 5th (Xinluo Information, top seven combined 68%); 2022 market share approximately 7%, ranked 7th (Liding); 2025 annual report self-states that affected by intensified market competition and YoY decline in ternary battery installations, its comprehensive ranking in the ternary material industry did not significantly improve vs 2024, 6-series materials lagged in import pace at major customers, and capacity utilization was at low levels.

6.3 Major Competitors

Company	Positioning	Notes
Ronbay Technology	688005.SH, private enterprise, full technology路线 (ternary/lithium manganese iron phosphate/sodium-ion/lithium iron phosphate), 2021 ternary share 14% ranked 1st	Lithium manganese iron phosphate shipments ranked first in industry; largest scale; 2025 cathode material gross margin 6.54% (-2.80pct)
Bamo Technology (Tianjin Bamo, Huayou Cobalt system)	Huayou Cobalt subsidiary, ternary, 2021 share 12% ranked 2nd	Huayou Cobalt precursor + cathode integration, upstream nickel-cobalt resources; 2025 cathode material gross margin not provided in summary
Easpring Material Technology	300073.SZ, central state-owned enterprise (Mining and Metallurgy Technology Group), ternary, 2021 share 12% ranked 3rd	Central SOE mixed-ownership reform pioneer, gross margin long-term industry-leading, high overseas proportion; 2025 cathode material gross margin not provided in summary
Changyuan Lico	688779.SH, central state-owned enterprise (China Minmetals), ternary, 2021 share 9% ranked 4th	Minmetals Group resource end (nickel-cobalt mines) advantage; 2025 cathode material gross margin not provided in summary
XTC New Energy	688778.SH, local state-owned enterprise (Fujian SASAC), ternary, 2021 share 6% ranked 7th	Xiamen Tungsten system, mixed-ownership reform introducing strategic investors; 2025 cathode material gross margin not provided in summary
Zhenhua E-chem	688707.SH, central state-owned enterprise (China Electronics), ternary single-crystal large-particle route, 2021 share 8% ranked 5th	Single-crystal differentiation route, yet lowest gross margin among the five key cathode companies; 2025 cathode material gross margin -14.29% (-0.26pct)

2025 five key cathode companies cathode material gross margin comparison (Zhiyan Consulting 2026-09-06 article): BTR 10.46% (+2.58pct), GEM 10.99% (+3.40pct), Huayou Cobalt 9.36% (+1.54pct), Ronbay Technology 6.54% (-2.80pct), Zhenhua E-chem -14.29% (-0.26pct), with Zhenhua E-chem being the only negative-margin company among them. The company ranked 5th with 8% ternary share in 2021, but its 2025 cathode material gross margin is significantly lower than peer comparables, reflecting its disadvantage in scale, integration, and upstream resource layout, with prominent passive price-concession characteristics in the midstream processing segment.

7. Risk Warnings

Risk of sustained negative gross margin and uncertain turnaround timing: The company had consecutive losses in 2024 and 2025 (net profit attributable to shareholders of -RMB 528 million and -RMB 432 million respectively), H1 2026 net profit attributable to shareholders remained at -RMB 174 million, non-GAAP -RMB 181 million, consolidated gross margin -6.93%, Q2 2026 standalone gross margin approximately -9.94%, none turning positive. If 6-series high-voltage material volume ramp and capacity utilization recovery fall short of expectations, the negative gross margin state may persist, and there is a risk that the company's profit inflection point continues to be delayed.
Risk of excessive single-customer dependence: The 2025 annual report shows top five customers sales of RMB 1.202 billion, accounting for 84.16% of annual sales, of which Customer 1 accounts for 67.02% (RMB 957 million), and the annual report explicitly states a situation where sales to a single customer exceed 50% of total (Customer 1, based on public industry reports, is identified as CATL, but the company did not directly name it in the annual report). If this core customer adjusts ternary procurement strategy, presses prices, or reduces orders under lithium iron phosphate route pressure, the company's revenue and gross margin will be directly impacted.
Risk of ternary route being continuously squeezed by lithium iron phosphate and the company's industry position failing to improve: H1 2025 lithium iron phosphate battery installations reached 81.4%, with ternary installations squeezed below 20%; 2025 domestic lithium iron phosphate cathode shipments were 3.944 million tonnes, accounting for 79.1%; the company self-states that affected by intensified market competition and YoY decline in ternary battery installations, its comprehensive ranking in the ternary material industry did not significantly improve vs 2024, 6-series materials lagged in import pace at major customers, capacity utilization at low levels, and traditional 5-series ternary market share continues to shrink.
Risk of gross margin disadvantage vs peers and integration shortcomings: In the 2025 five key cathode companies cathode material gross margin comparison, BTR 10.46%, GEM 10.99%, Huayou Cobalt 9.36%, Ronbay Technology 6.54%, while Zhenhua E-chem was -14.29%, the only negative-margin company among them; the company ranked 5th with 8% ternary share in 2021, but is disadvantaged in scale, integration, and upstream resource layout, with prominent passive price-concession characteristics in the midstream processing segment. If the industry price war continues, its relative weakness may further amplify.
Risk of high upstream supplier concentration and being a price taker: The 2025 annual report shows top five suppliers total procurement of RMB 837 million, accounting for 76.15% of annual procurement, of which Supplier 1 accounts for 45.99% (RMB 505 million), supplier names not disclosed due to trade secrets; the company is essentially a price taker with respect to upstream ternary precursors and lithium salts (costs directly linked to nickel, cobalt, lithium, and other metal prices), raw material price fluctuations will directly impact the cost side, and the company lacks upstream bargaining power.
Risk of frontier businesses (sodium-ion, solid-state battery materials) not yet forming scale revenue and uncertain commercialization pace: Among sodium-ion battery cathodes, only layered oxides have achieved hundred-tonne level shipments, polyanion is under customer validation; on solid-state batteries, although composite solid electrolytes have achieved stable tonne-level production, oxide-modified ternary and lithium-rich manganese-based are still in sampling stage; solid electrolyte pilot line equipment installation has only entered final stage, and capacity expansion needs to be planned in coordination with commercialization progress and order demand; phosphorus-carbon anode is still in R&D stage. The above directions currently contribute limited revenue to income; if validation or volume ramp falls short of expectations, it will be difficult to offset the decline in traditional ternary business.
Risk of uncertain large bad debt recovery and cash flow volatility: For a total of RMB 64 million in large bad debts from two customers, the company has established a special collection team, pursuing recovery through business negotiations, lawyer's letters,

Reports are generated by AI from public online information and may contain errors or outdated information. They are for research only, not investment advice. Verify material facts against company filings and authoritative sources.